What about Profitability?

noelward

Well-known member
What about Profitability?
Offset yields new advantages

By Noel Ward, Editor@Large

A couple years back I spent time talking with C-level print business owners in several states. They had three things in common: one, many had large, productive inkjet presses; two, they had a few toner presses; and three, all had a couple of big honkin’ offset presses.

These fleets could not possibly have been cheap so I asked why they had all these devices. All said they needed the full mix to meet customers’ needs. Be it run length, color, variable data, speed, and more. Customer requirements drove the decision to invest in the mix of equipment that kept the money rolling in. For instance, the offset presses were the go-to for medium to long runs and when multiple spot colors were needed; the digital beasts were the choice for variable data.

Being a digital print guy, I’d been in dozens of shops that were all digital all the time and had heard vendors talk about efficiency, vanishing makeready times, and how digital presses reduced waste by printing only the number of pages or boxes needed. I also learned that the view from the shop floor (and owners’ office) could be a tad different. Skeptical by experience, I wanted a different point of view.

So I called up one of the few offset press companies still standing—Koenig & Bauer—which makes some of the fastest offset presses a sheet or web of paper have ever seen. Walter Chmura, VP of Technical Sales, provided a different view of offset relative to digital while raising some interesting points about profitability.

Chasing Profitability: Follow Your Money
There are some jobs that can simply make sense to run on a digital press: variable data, a run length of 50 sheets or less, a job that has to be delivered in three hours, etc. Yet according to K&B, when variable data is not needed, its flagship Rapida 106 X press, enabled with simultaneous plate changes, can profitably do what the company calls “Ultra Short” runs in the 50 to 500 sheet range, a territory previously staked out by digital presses.

Enabling this is automation. For instance, digital presses are often noted for running autonomously, but many offset presses, including those from K&B, do the same thing. After all, the press operator running your offset press is not running between printing units and the main control console to keep the press cranking out pages. As Chmura explained, K&B’s presses can be configured to wash inking units automatically while the press is running, all plates can be loaded in less than a minute, and so much more, all autonomously.

The decision about digital versus offset is a place where one can follow the money, Chmura noted that the decision of which press to use should really consider which press will deliver the best profitability. But profitability comes in many guises and can be derived in several ways. A few print providers I’ve talked with have hinted that it is ultimately a matter of which press (and associated support activities) will deliver the best profitability for a given job. One factor is the TCO or total cost of ownership. For digital presses this may start with lease costs.

The Cost Conundrum
Every digital press owner I know has been making lease payments for a couple of decades. I work with some who require variable data on every job. For them, leasing is a cost of doing business. There’s absolutely nothing wrong with this but lease costs can be deceiving.

The high-dollar price tag of a big offset press is often amortized over 5 to 10 years. In contrast, new leases for a digital box arrive every 3 to 5 years when the sales guy from Canoxdigoh seeks to ink a deal. A new lease may be less money but arrives with a shorter productive lifespan and the machine can’t always be upgraded. The new box may offer more throughput, a better color gamut, tighter registration, more substrate choices, and other capabilities that are important.

“Digital press technology continually changes,” notes Chmura. “A 3-to-5-year-old digital press can be essentially outdated,” He contrasted this to modern offset presses that can often be continually upgraded as new capabilities are introduced, without changing the entire press. To be sure, bringing in new technology, such as some types of automation, can be a spendy undertaking, but may be less expensive over time than starting a new lease on the next digital press and the one after that. Depending on how you and your accountant or financial advisor run the numbers, Chmura maintains that a digital press may cost more than it appears. Which can have a direct impact on profitability.

For instance, Chmura highlighted the claim of zero waste with digital presses. While modern color management helps ensure color will be more or less right when the first page lands in the output tray, a significant number of pages often have to be printed and paid for via a click charge to test jobs destined to be bound or for special treatment such as trimming or die-cutting on post-press devices.

“These pages are often not factored into the total page count and costs associated with a job” Chmura noted, “so they add costs that may not be counted.” While many digital press owners do indeed account for the added pages as a cost of doing business, the only way to accurately determine profitability at the job level is by attributing those costs to each job.

Yet another factor is the world-wide decline in run lengths. For jobs that don’t require variable data an automated offset press that can handle short and ultra-short runs can be more profitable than a digital press.

What are customers asking for?
Another part of the story is color. Digital press makers have worked hard at offering one or two spot colors on both toner and inkjet presses but there are plenty of jobs where multiple spot and custom colors are required, especially for corporate logos that cannot be economically achieved on a digital press. Other customers seek out special treatments, such as inline application of metallics that cannot be run on digital presses

And don’t forget labor. For instance, if you must run a job through an offset press to create a shell that matches a customer’s logo color, then through a digital press, what is the combined cost for the final job? Assuming variable data is not required it may be more profitable to run the job on an automated offset press. There was a time when your offset operator was more expensive than your digital press operator, but not so anymore. You must look all factors but most importantly is total up-time or the availability to print net sellable sheets on the floor.

Other technological advances matter too. For instance, LED drying is an important capability for numerous applications, especially as print speeds increase and turnaround times shrink. Born of chemistry and physics, LED drying on K&B’s Rapida presses will shorten work-in-process and delivery times, even enabling same day turnaround for offset jobs. And, because a job costs you less, it is more profitable.

Size matters
The majority of digital presses have a maximum sheet size of 29 inches. This width works well for some applications but can come up short for packaging. Some of this is due to substrates and some to overall size of a package, but for smaller containers (many folding cartons for example) printing economics demand multiple-up on a sheet or web. Most digital presses cannot handle the wider width, resulting in longer runs and increased waste. In contrast, a full-size automated offset press can run many jobs faster, more efficiently and even run one job after another with minimal support from the press operator.

Do the Math
“Overall,” says Chmura, “commercial printers need flexibility, low cost of ownership and the ability to make profits for all run lengths from 50 to 50,000. Today's technology offset is the way.”

Digital presses certainly fill needs with respect to variable data, but absent this requirement highly automated offset presses can do more than those from a couple of decades ago. Look at all the costs feeding into profitability and do the math before you decide how a job will be printed. The best press to use may be an automated offset press. Make the choice based on flexibility, availability and profitability.
 

What About Profitability?

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What about Profitability?
Offset yields new advantages

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